THE boss of Barclays yesterday defended bonus payments saying they were necessary to prevent an exodus of key staff at its investment bank.

Antony Jenkins said it had increased bonuses by £200million to £2.4billion last year to prevent the business suffering as a result of people leaving.

There has been speculation that 700 investment bankers left Barclays’ US operation to join rivals last year.

Jenkins admitted that raising bonuses had been the hardest decision he had made since taking charge in 2012 but there had been a danger of the business ­contracting.

He added: “You get into something of a death spiral. I understand the sentiment from shareholders and broader society that it feels unreasonable but if we are going to be a world-class investment bank then we have to deal with the compensation structure as best we can.”

Jenkins made his comments as ­Barclays’ annual report showed that 481 people were paid more than ­£1million last year of which 27 per cent were in the UK. The bank said Jenkins could earn £7.2million this year in pay, bonuses and other benefits.